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The former parts division of General Motors Corp. (NYSE: GM), Delphi Corp., signed settlement and restructuring agreements with its former parent last Friday as it rolls out is plan to emerge from Chapter 11 bankruptcy.

Delphi is trying to put behind it a slew of legal wranglings with GM so that it can begin the process of creating a profitable company without a shaky future. Its reorganization plan, which has been a long (long) time coming, outlines many areas the company has singled out as key to its return from bankruptcy. One of the biggest wins for GM is a $2.7 billion cash distribution that the automaker will receive in lieu of its multiple claims against Delphi.

But the fun does not stop there -- Delphi has reached agreements with all six U.S. labor unions. The company will continue to operate four UAW-represented sites, three IUE-CWA-represented sites and one USW-represented site. Ah, the unions get their comeuppance here (no surprise). However, a sour note is that 25 Delphi sites in North America will be sold or closed.

The relationship between GM and Delphi and the resulting bankruptcy of the latter is one of the more complex situations in the automotive business in the last decade or so. GM needs to get this behind it so that it can concentrate on the business of, you know, making cars and trucks that customers want to buy, and at competitive prices. The Delphi situation has been a drag on resources for far too long, but the clouds are starting to part.

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